Question
According to David Ricardo, when one country has a comparative advantage in
manufacturing a product compared to other countries, it has a lower _
should export the product.
average total cost
fixed cost
opportunity cost
manufacturing a product compared to other countries, it has a lower _
should export the product.
average total cost
fixed cost
opportunity cost
Ask by Powell Morrison. in the United States
Mar 14,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
A country should export a product when it has a lower opportunity cost in manufacturing that product compared to other countries.
Solution
- David Ricardo’s theory of comparative advantage shows that a country should specialize in the production of goods for which it has the lowest
. - The main idea is that even if one country is more efficient in the production of all goods (absolute advantage), it should still export those products for which it sacrifices the least in terms of other goods – this is measured by the opportunity cost.
- Thus, when a country has a comparative advantage in manufacturing a product, it means it has a lower
relative to other countries, and it should export that product.
Final Answer:
Answered by UpStudy AI and reviewed by a Professional Tutor
Like
error msg
Explain 
Simplify this solution The Deep Dive
When one country has a comparative advantage in manufacturing a product, it has a lower opportunity cost compared to other countries. This concept means that the country sacrifices less of other goods when producing the specific product, making it more efficient to export it rather than produce everything domestically.
Understanding comparative advantage can transform economies! Countries that specialize and trade based on their strengths often see increased productivity and growth. This means more goods and services become available to consumers around the globe—everyone wins!
